Canadians are the most confident in more than three years that real estate prices will continue to rise, according to weekly telephone polling, a positive signal for the recovery.
About half of respondents, or 49.2 per cent, see home prices climbing over the next six months, the highest share since May 2017. That helped lift the Bloomberg Nanos Canadian Confidence Index, a composite measure of financial health and economic expectations, to 55.1 last week, levels last seen in early March.
It’s been nine months since Canada first shut down its economy to contain the spread of COVID-19, leading to a record plunge in consumer confidence. The index began to recover over the summer but a second wave of virus cases put the brakes on that.
However, the vaccine rollout that began this month in Canada is stirring hopes that the pandemic’s end is near even as case counts continue to rise. Two of the largest provinces, Ontario and Quebec, have tightened restrictions to try to control the spread.
Record-low interest rates and strong demand for more spacious accommodation are pushing Canadian home prices and sales to record highs this year. Prime Minister Justin Trudeau’s government has pledged to keep the fiscal taps open to support the recovery, and the income support measures have left households flush with cash.
“Consumer confidence in Canada continues to gain strength with news on vaccines,” Nik Nanos, chief data scientist at Nanos Research, said in the report. “Forward perceptions on both the strength of the economy and the value of residential real estate gained a full five percentage points in the past four weeks of tracking.”
Every week, Nanos Research surveys 250 Canadians for their views on personal finances, job security, the economy and real estate prices. Bloomberg publishes four-week rolling averages of the 1,000 responses.
Key Highlights
Real estate optimism continued to climb, with only 12.7 per cent of respondents saying they believe home prices in their neighborhood will decrease in the next six months, the lowest share since early March
Views on the economic outlook also improved. Some 23.7 per cent of consumers expect the country’s economy to be stronger in the next six months, the largest share since June and up from 18.1 per cent at the end of November
Views on personal finances were largely unchanged last week with 14.9 per cent of Canadians saying they were better off compared with a year earlier, and 25.7 per cent saying they were worse off
Measures of job security fell on the week but were still higher on the month
Sentiment rose in every province except Quebec, which is experiencing some of the strictest containment measures to lower virus cases
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
